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Spain pays higher interest rate to raise $6.2 bln

Thursday - 2/7/2013, 6:50am EST

MADRID (AP) -- Spain has had to pay higher interest rates to raise EUR4.6 billion ($6.2 billion) in the first debt auction since a scandal over alleged slush fund payments in the ruling Popular Party broke last week.

The Treasury sold EUR1.95 billion in two-year bonds at an average rate of 2.82 percent, up from 2.48 percent on Jan. 10. It sold EUR2.07 billion at a rate of 4.12 percent, up from 3.77 percent on Jan. 17. It placed another EUR593 million at 5.79 percent, compared with 5.55 percent Jan. 10.

Overall demand was more than double the amount offered.

Spain's borrowing costs have dropped sharply in recent months after European leaders took measures to bolster investor confidence. But recent allegations of corruption have shaken the Spanish government despite its denials of wrongdoing.

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